the fundamentals of understanding how money can work for you.

[simonjulie]

Hi Folks
I am writing this in the hope that people new to this forum can gain an insight into the way we can turn working for money into money working for them. Here are some of the most important and fundamental ideas I have come to understand from my experience as a property investor and member of this forum. The first clues are in relationship to investing money whether it be, real estate, shares or business. Both the below clues go hand in hand in relationship to each other.

1. Recognize how much money you are putting in yourself, both initially and on an ongoing basis. This will involve developing a way to track and assess your contribution and flow of money into your investment. Your time is another topic so I won't go down that track just yet.
2. Ask yourself the question, when will I get My money back? If the answer is not quantifiable then it exposes a weakness in your wealth creation strategy.
So Know(due diligence) what you are putting your money into.
It is important to have a defining answer to that question so if the answer is not clear cut then a strategy which entails the establishment of realistic goals is required, which will enable assessment of the investment at regular intervals into the future.

If a person has the above strategies firmly established they will be better equipped to recognize a good investment deal when it appears. You will find that practicing the above disciplines will go a long way toward educating yourself financially.
Try it and see how it works for you.
Simon

 

[simonjulie]

I must be talking to the hand
100 reads and no responses. That must be some kind of a record for this forum.
Simon

 

[Dazz]

Try it and see how it works for you.

...OK, we're trying it, but give us some time to try it first....

 

[simonjulie]

...OK, we're trying it, but give us some time to try it first....

"He sits and waits in excited expectation for the penny to drop, like it had never dropped before".

 

[ethereal]

Property investing - seems like it will take a very long time to get my original contribution back if ever, but if borrowing against equity to fund further investment is considered getting it back then it is a different story.

I had begun to wonder when one should be able to enjoy the results of all the hard work.

I have been actively trading shares since August as an experiment/passtime in getting money back quickly and can tell you that it has been very hard to wrap my frugal and disciplined head around taking profits and spending them as opposed to reinvesting. This is a very small part of my investing strategy that is making a very big difference to my available cash situation.

It is lovely to know that when I buy my groceries I didn't have 'work' to do so. I am starting to analyse the cost of things in terms of 'how many trades' instead of how many paycheques.

I won't always get it right but so far it is been great fun!

Louise

 

[markp]

Hi Folks
I am writing this in the hope that people new to this forum can gain an insight into the way we can turn working for money into money working for them. Here are some of the most important and fundamental ideas I have come to understand from my experience as a property investor and member of this forum. The first clues are in relationship to investing money whether it be, real estate, shares or business. Both the below clues go hand in hand in relationship to each other.

1. Recognize how much money you are putting in yourself, both initially and on an ongoing basis. This will involve developing a way to track and assess your contribution and flow of money into your investment. Your time is another topic so I won't go down that track just yet.
2. Ask yourself the question, when will I get My money back? If the answer is not quantifiable then it exposes a weakness in your wealth creation strategy.
So Know(due diligence) what you are putting your money into.
It is important to have a defining answer to that question so if the answer is not clear cut then a strategy which entails the establishment of realistic goals is required, which will enable assessment of the investment at regular intervals into the future.

If a person has the above strategies firmly established they will be better equipped to recognize a good investment deal when it appears. You will find that practicing the above disciplines will go a long way toward educating yourself financially.
Try it and see how it works for you.
Simon

I agree entirely

 

[Petal]

Hi Folks

2. Ask yourself the question, when will I get My money back? If the answer is not quantifiable then it exposes a weakness in your wealth creation strategy.

Simon

Simon I am trying to remember, are you and Julie using the Living on Equity system. This is what I hope to do in the future and if that is the case then I guess I don't really want to "get my money back", I just want to use it within the equity to live off. So now to confuse myself futher getting money out to live on equity might be termed "getting my money back"

 

[simonjulie]

Simon I am trying to remember, are you and Julie using the Living on Equity system. This is what I hope to do in the future and if that is the case then I guess I don't really want to "get my money back", I just want to use it within the equity to live off. So now to confuse myself futher getting money out to live on equity might be termed "getting my money back"

We all live off equity it just depends on for how long.
How many days forward can you carry on, given your current budget before you run out of money? If that money is replacing itself passively then you have created a perpetual money machine which will allow you to do something else instead of working for money. Your money is working for you.
Believe me when I say to you that you will want to get your money back or you are not an investor with a future in the game. The point of investing is getting back what you put in and more and more and more.
Simon

 

[willair]

2. Ask yourself the question, when will I get My money back? If the answer is not quantifiable then it exposes a weakness in your wealth creation strategy.

=
Simonjulie,interesting set of questions to ask yourself,but no2 is the standout , the money part has no importance at all to me if you understand what value is when it stares you in the face..
I have been at the Auctions all morning buying old pre 1900's Australian-US banknotes and gold and silver coins,i know the value level even before my hand goes up in the air, i know they can be sold within 24 hours
with a 250% markup, and i think that within inself is the key, know your market inside out, have a sharp exit plan,and stay happy come what may.
willair..

 

[simonjulie]

Property investing - seems like it will take a very long time to get my original contribution back if ever, but if borrowing against equity to fund further investment is considered getting it back then it is a different story.

I had begun to wonder when one should be able to enjoy the results of all the hard work.

I have been actively trading shares since August as an experiment/passtime in getting money back quickly and can tell you that it has been very hard to wrap my frugal and disciplined head around taking profits and spending them as opposed to reinvesting. This is a very small part of my investing strategy that is making a very big difference to my available cash situation.

It is lovely to know that when I buy my groceries I didn't have 'work' to do so. I am starting to analyse the cost of things in terms of 'how many trades' instead of how many paycheques.

I won't always get it right but so far it is been great fun!

Louise

Why spend the profit? I did not say that. I am a little confused by your post.
Keep a disciplined approach to investing but have fun with the knowledge you have gained through your experience.
Simon

 

[simonjulie]

=
i know what they can be sold within 24 hours
with a 250% markup, and i think that within inself is the key, know your market inside out, have a sharp exit plan,and stay happy come what may.
willair..
important

That is exactly why I said :
"So Know(due diligence) what you are putting your money into."

Great deals willair Have fun with that.
Simon

 

[ethereal]

Why spend the profit? I did not say that. I am a little confused by your post.
Keep a disciplined approach to investing but have fun with the knowledge you have gained through your experience.
Simon

Guess I am still not sure what you mean by getting your money back. We have been madly investing for 10 years reinvesting all profits, positive cash flow and dividends. We meet living expenses with income from working. The pot has grown fat with equity but all this makes no difference to our daily existence apart from a fuzzy sense of security and an inheritance for the kids unless we spend profits or equity or dividends or rental income.

Trading shares I get the money back, spend the profit and recycle the capital. And it is more fun than watching Oprah.

Always learning and like to hear your views.

Louise

 

[simonjulie]

Guess I am still not sure what you mean by getting your money back. We have been madly investing for 10 years reinvesting all profits, positive cash flow and dividends. We meet living expenses with income from working. The pot has grown fat with equity but all this makes no difference to our daily existence apart from a fuzzy sense of security and an inheritance for the kids unless we spend profits or equity or dividends or rental income.

Trading shares I get the money back, spend the profit and recycle the capital. And it is more fun than watching Oprah.

Always learning and like to hear your views.

Louise

Hi Louise
You might get more excited about investing if you were to understand the power of leverage more. You more than likely have a large number of lazy dollars sitting in your equity. There is real power in leverage but with power there is also greater risk.
Getting your money back is simple. Ask yourself how much has this investment cost to establish and maintain. If you know the answer to that question then look at the profit our unused equity still in the investment. You don't get your money back until you either cash it in or refinance the investment. How quickly did you get your money back is a way to asses whether you made a good or a bad investment decision.
Simon

 

[Peter Parker]

I must be talking to the hand
100 reads and no responses. That must be some kind of a record for this forum.

Happens more than you think.

Sometimes a post that I think is really good (and must have required effort to write) gets no responses, while something lighter or less profound gets acclamation.

 

[yieldmatters]

Hi Folks
I am writing this in the hope that people new to this forum can gain an insight into the way we can turn working for money into money working for them. Here are some of the most important and fundamental ideas I have come to understand from my experience as a property investor and member of this forum. The first clues are in relationship to investing money whether it be, real estate, shares or business. Both the below clues go hand in hand in relationship to each other.

1. Recognize how much money you are putting in yourself, both initially and on an ongoing basis. This will involve developing a way to track and assess your contribution and flow of money into your investment. Your time is another topic so I won't go down that track just yet.
2. Ask yourself the question, when will I get My money back? If the answer is not quantifiable then it exposes a weakness in your wealth creation strategy.
So Know(due diligence) what you are putting your money into.
It is important to have a defining answer to that question so if the answer is not clear cut then a strategy which entails the establishment of realistic goals is required, which will enable assessment of the investment at regular intervals into the future.

If a person has the above strategies firmly established they will be better equipped to recognize a good investment deal when it appears. You will find that practicing the above disciplines will go a long way toward educating yourself financially.
Try it and see how it works for you.
Simon

It's hard to argue with that! Hence no replies!!

 

[asdf]

Hi Simon & Julie, you guys must find it tough holding the banks back from leaving piles of cash in the front lawn of your equity filled IPs.. These sleeper areas have really crept up hasnt it? I'm amazed how much KH has moved in just over a year. Plus the rents are increasing nicely. Happy days really.

 

[Ausprop]

I must be talking to the hand
100 reads and no responses. That must be some kind of a record for this forum.
Simon

perhaps many if us thought it was spot on and had nothing to add, tho I suspect alot may not have understood what you were getting at, particularly on a forum that is predominantly buy and hold. Resi IPs tend to be take cash rather than return it. So you need to either value add or LOE in order to retrieve your upfront equity.

 

[Ausprop]

Hi Simon & Julie, you guys must find it tough holding the banks back from leaving piles of cash in the front lawn of your equity filled IPs.. These sleeper areas have really crept up hasnt it? I'm amazed how much KH has moved in just over a year. Plus the rents are increasing nicely. Happy days really.

KH? I must be out of the loop

 

[simonjulie]

Hi Simon & Julie, you guys must find it tough holding the banks back from leaving piles of cash in the front lawn of your equity filled IPs.. These sleeper areas have really crept up hasnt it? I'm amazed how much KH has moved in just over a year. Plus the rents are increasing nicely. Happy days really.

We have been sitting on our hands with property this last twelve months but we are starting to feel the circulation back in our fingers as our palms become itchier every day.
It is so important to have that big bag of money to see you through the dry times.
Cheers
Simon

 

[simonjulie]

KH? I must be out of the loop

Killarney Heights near Roseville on the other side of the bridge.
People are dying to leave because it is so good.(read between the lines)
15minutes into the city on an express bus and schools and shops and maybe one day soon, a whopping big new hospital up the streetin Frenchs Forest.
Cheers
Simon